After the announcement of a merger between WPP firms BCW and Hill & Knowlton, PRWeek caught up with holding company CEO Mark Read to get more insight into the blockbuster move. The new agency, Burson, will be the largest PR agency in the world by revenue when it becomes fully operational on 1 July.
Below, Read discusses the consolidation strategy, how the new agency will address client conflicts and what role AI played in the merger.
How does this merger fit in with WPP’s overall consolidation strategy?
Every situation is different. BCW and Hill & Knowlton had both done well after Covid, and public relations has really started to demonstrate its value and has come back very strongly during and post-Covid. They’re strong businesses and have done well.
But I couldn’t help think that, given the competitive environment, the need to invest in [artificial intelligence] and technology, the importance of global reach and scale for major clients and the value that senior-level expertise can bring, the companies could be stronger together than they were apart. If these were two independent businesses that came together, the resulting company would be stronger than one or the other. So that’s what we had to do within WPP.
Explain the thinking behind the merger.
Both [Hill & Knowlton CEO] AnnaMaria [DeSalva] and [BCW Group CEO] Corey [duBrowa] are extremely talented leaders. We also had two people who could work together and make this successful. That’s important as well.
It’s not about BCW devouring H&K or H&K devouring BCW. I’m pleased to bring back the Burson name. I’ve been accused in the past of eliminating historic brand names [such as Grey, JWT, Wunderman], which has never been my intention. It’s about having the most relevant name, and frankly, I often found myself referring to BCW as Burson, which was a strange thing to do.
Harold [Burson]’s legacy and his values were very strong, which is not to say they’re not strong at H&K, because it’s not a reflection on them. We had to get to something simple. The new agency bears Harold’s name but is relevant for 2024, with relatively new leaders within WPP in AnnaMaria and Corey, as well. They both recruited really strong talent recently, such as [North America CEO] Craig Buchholz at Hill & Knowlton and Kristine Boyden [and Michelle Hutton] at BCW among others.
It's going to be unbeatable. It creates a business with more scale and more strength that can better serve our clients. That’s the logic.
Has the new Burson leadership got enough pure agency experience to fulfill its purpose?
AnnaMaria and Corey have lots of experience on the agency and client sides. Clients these days want senior-level counselors and advisers. Look at the success of FGS Global, which is based on the seniority and experience of its talent. Whether they’ve worked on the agency or the client side is irrelevant.
Clients really value input from people who’ve been in their shoes. There’s plenty of people in both agencies, including the leadership, with experience. I don’t worry about that. The leadership is drawn from both companies. What’s important is to keep the best people in roles where they’re going to have a bigger impact. It’s going to be good for the talent in both businesses.
How worried are you about client conflicts between the two firms’ rosters?
We have mechanisms to handle it, and clients don’t need to be concerned about the people they work with. We can put in place teams to prevent there being a conflict.
Why did you announce it now when the merger doesn’t formally happen until 1 July?
We have our capital markets day coming next week. I wanted to get all the major news behind us so we could talk about the new WPP. We also wanted to give the teams time to work on the right structure. They’re going to be working together from day one—they’re not going to wait. They have been already.
How much was this merger driven by AI?
AI was part of it, and I don’t mean that from a cost perspective. From an investment perspective, it’s going to be easier to do it once with the combined company than to do it twice. It’s going to have the scale to invest and build the tools we need.
AI has changed some of the rules about the scale we need to compete. AI is going to benefit the smaller and bigger players. It will be the people in the middle that find it most challenging.
WPP’s share price has been under severe pressure. How are you changing your narrative to address that?
You’ll see that next week [at the capital markets day]. We’ll go into some detail about how we’re going to accelerate our margins and our growth, how we use AI today and in the future.
Was it a conscious decision to create the largest PR firm in the world?
Our goal is not to be the biggest, but the best.
Does the concept of a maxi-quadrennial revenue bump due to the U.S. election and major sports events that was invented by your predecessor as WPP CEO, Martin Sorrell, still hold sway?
In the old days when we were on commission and it was very linked to media pricing, the big election spend led to a boost in fees for the media agencies and the creative agencies as well. Those days have moved on. It might be beneficial, but macroeconomic events and inflationary forces are much more powerful now. I think things will get better as 2024 goes on, but we’ll see. The U.S. economy doesn’t feel easy, but I keep reading that the financial markets are at an all-time high.
